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obligation by participating in various schemes to collect
kickbacks from the Five and misdirect income through Kanter's
maze of entities.
Consistent and substantial understatements of income are
strong evidence of fraud. See Marcus v. Commissioner, 70 T.C.
562, 577 (1978), affd. without published opinion 621 F.2d 439
(5th Cir. 1980). Moreover, a pattern of consistent
underreporting of income, when accompanied by other circumstances
indicating an intent to conceal income justifies the inference of
fraud. See Holland v. United States, 348 U.S. 121, 137 (1954).
Lisle omitted income received from transactions with the Five
during the years 1984 and 1987 through 1989 in the total amount
of $1,280,547. Additionally, for the years 1978 through 1983,
1984, and 1985, years not before us here, he omitted $2,734,707.
Lisle allowed Kanter to commingle his share of the kickback
moneys in the laundering mechanism Kanter created to conceal the
true nature of the income and the identity of the earner of the
income. Lisle’s use of the various Kanter sham entities
(including among others, IRA, Carlco, KWJ Corp., KWJ Co., Essex,
Zeus, Holding Co., Int’l Films, HELO, Administration Co., and
Principal Services) made it difficult and sometimes impossible to
trace the cash-flow and is substantial evidence of Lisle’s intent
to evade tax. See Scallen v. Commissioner, supra at 1371.
Commingling by laundering is an indication of fraudulent intent.
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